Telecoms firm Pipex Communications yesterday formed an alliance with technology giant Intel to provide a wireless alternative to 3G in major UK cities.
The debut of WiMax is expected to take place in London and Manchester next year following trials and analysts believe it could pose a threat to revenues of mobile phone giants. That is because users will be able to log on at "hotspot" areas that span whole cities and make voice calls over the internet through sites such as Skype, bypassing the phone networks.
At present computer users have to be in designated "wi-fi" areas such as cafes and airports. London-based Pipex is expected to roll out its wireless network to six more cities by 2008 and would ultimately be present in 50 urban areas in the UK.
Intel Capital, the venture capital investment arm of Intel, is investing $25 million (£14.5 million) in the new company which will be called Pipex Wireless. A search is underway to find a suitable candidate for chief executive.
It comes a week after Pipex acquired the Homecall fixed line business of Staffordshire telecoms tycoon John Caud-well for £43 million, adding more than 500,000 subscribers to its existing customer base of 575,000.
Pipex turned over 30 per cent more money than last year at £133 million and made pre-tax profits of £7.1 million in 2005 - up from £6.2 million a year earlier.
Executive chairman Peter Dubens said the deal for Homecall and other acquisitions meant the company could have the opportunity to sell customers more than one product, such as internet access and fixed-line services.
Since the start of January, Pipex said 29 per cent of its customers were now taking more than one service.
Mr Dubens said: "In addition we have started our local loop unbundling programme which will enable us to deliver higher speed services to our existing and new customers."
Pipex said it had also identified 100 exchanges owned by BT where it will fit its own telecoms equipment.
This process should repay itself over two years.
Shares were down 0.5p at 15p.